- Shoprite has acquired Vida e Caffè and completed its purchase of a majority interest in R&A Cellular.
- Reuters placed the combined value of the acquisitions at approximately $62 million.
- Vida has more than 400 outlets, while R&A supplies payment devices to informal retailers.
- The acquisitions take Shoprite into transactions occurring beyond conventional supermarket tills.
Shoprite bought Vida e Caffè and completed its majority <a href="https://usglobalxpress.com/editorial-banks-love-operation-vulindlela-but-where-is-fixed-investment/” title=”EDITORIAL | Banks love Operation Vulindlela, but where is fixed investment?”>investment in R&A Cellular as it expands beyond conventional grocery sales
Reutersreported that the two acquisitions were worth approximately $62 million (R1 billion) combined
Shoprite has not publicly separated the price paid for each company. The combined figure should therefore remain attributed to Reuters
Shoprite enters the speciality coffee market
Vida e Caffè was founded in Cape Town in 2001 and has grown into South Africa’s largest speciality coffee chain
Its network includes standalone cafés and outlets in shopping centres, airports, fuel stations and other high-traffic locations
The acquisition gives Shoprite access to frequent convenience purchases that differ from customers’ planned supermarket spending
It also takes the group further into the quick-service restaurant market, where products can carry higher margins than basic groceries
Chief executive Pieter Engelbrecht said Vida would strengthen Shoprite’s position in coffee and convenience retail
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The company has not disclosed Vida’s revenue, profit or the percentage of its outlets owned by franchisees
It has also not announced that Vida cafés will be installed in every Shoprite or Checkers supermarket
Taking Shoprite’s services into informal shops
R&A Cellular serves a different part of the market. Its point-of-sale devices allow informal traders to sell electricity, mobile airtime, vouchers, gaming products and other digital services
Shoprite completed the majority acquisition on August 14 after receiving regulatory approval
BI Africa reported the original transaction in March, when completion remained conditional
R&A already worked with Shoprite by allowing merchants to sell some of the retailer’s vouchers through its devices
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Ownership now gives Shoprite a way to distribute more financial and digital services through neighbourhood shops in townships and rural communities
That allows the retailer to earn from transactions in places where building and operating a full supermarket may not be economical
Shoprite has not disclosed the precise number of R&A devices, merchants or active customers
From eight supermarkets to an African retail giant
Shoprite traces its history to the purchase of an eight-store Western Cape grocery chain in 1979
Former chief executive Whitey Basson used acquisitions, aggressive pricing and expansion into underserved towns to turn it into Africa’s largest retailer
The company later entered numerous African markets but withdrew from several, including Nigeria, Kenya, Uganda, Ghana and Malawi
Its operations are now more heavily concentrated in South Africa
The Vida and R&A acquisitions show Shoprite seeking new areas of growth in its strongest market instead of relying only on opening more supermarkets
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Sales reach nearly $17 billion
Shoprite disclosed the acquisitions alongside its results for the 52 weeks ended June 28. Group sales increased 7.2% to approximately $16.8 billion (R270.8 billion)
Its principal South African supermarket business generated R228.7 billion in sales, while headline earnings from continuing operations rose 12.2%
Shoprite said growth came mainly from additional customers and increased sales volumes rather than large price rises
Selling-price inflation averaged 0.8%, compared with South Africa’s official food-inflation rate of 3.9%
The retailer said approximately 11,500 products were cheaper than they had been one year earlier
Shoprite’s revenue from value-added services, tickets and financial-transaction commissions rose 9.6% to R1.37 billion
That growth helps explain the purchase of R&A. Shoprite can use the company’s network to process more transactions outside its stores
Vida similarly gives the group access to money spent on coffee, breakfast and convenience products
The two acquisitions target different consumers, but both move Shoprite beyond the traditional supermarket till